Transcripts For BLOOMBERG Whatd You Miss 20171204

Trudeau canceled the joint media availability in beijing with each leader making a brief statement and taking no questions. U. K. Prime minister theresa may says she is confident of a positive outcome when she meets with eu officials this week. May spoke at a joint News Conference with Jeanclaude Juncker today. Clear, crucially, that we want to move forward together. On a couple of issues, some differences remain that require further negotiations and consultation. Continue, but we will reconvene before the end of the week and i am also confident that we will conclude this positively. May spend after they failed to reach an agreement to move the next stage of brexit negotiations. Whator Sticking Point is happens to the irish border when Northern Ireland leads the eu along with the u. K. Global news powered by more than 2700 journalists and analysts in over 100 countries 120 countries. Im Mark Crumpton. This is bloomberg. Julia live from bloombergs World Headquarters in new york, im julia chatterley. Scarlet im scarlet fu. Joe im joe weisenthal. Julia 30 minutes from the close of trading. Putting a damper on tax overhaul optimism. In tax the next step overhaul is reconciling the differences between the house and senate bills. Republican lawmakers will have to come to an agreement on everything from individual tax breaks to the timing of a Corporate Tax break cut. Vanguard is sounding the alarm on equity returns in 2018. The firm putting out the most cautious outlook in a decade. Vanguards chief economist joins us. And no deal on brexit. Theresa may forced to leave brussels and to handed over after troubles with the divorce talks within the eu. Vanguard market and economic report for 2018 is out and is the most guarded outlook in a decade. Questioning of volatility joe davis we just pointed out that you are the most cautious you have been in a long while. Explain why. Takes for having me. One is just the stellar performance weve had in the Capital Markets over the last seven years. The direction wasnt a surprise for us, but if anything, the magnitude has even exceeded some fundamentals. I think that in addition to the backdrop of intentionally slightly tighter Monetary Policy , it puts an end for valuation on economic fundamentals. Strategiesned shiny in these markets. It may have a very marginal benefit and it will be incremental to the more solid sort of returns. Getting back to basics. Lowering the cost of portfolio, perhaps lowering the spending returns. If you are an institution, the sky is not falling with respect to the Capital Market outlook. At the same time, we have realistic expectations of what this will generate from her return perspective over the next five years. Joe slightly more cautious stance. Investors avoid shiny objects. There are several free lunches, if i should use that term with respect to investors, that should certainly be harnessed. Alone, there. S. Has always been a case for compelling global diversification. Its Even Stronger today. A case will have highquality fixed income, nothing wrong with high yield or credit tilt in the portfolio. We are likely to be in store for some increases in equity market volatility. Investors could harness it as well. They have expected power, and its even higher than what we would of said two years ago. When you look at the most pronounced risk, it is that Global Labor Market that grows ever tighter. It results in a cyclical uptick in inflation. Isre is that most prominent . It the United States or elsewhere . The large economies in the world, they have a near low and very likely will have lower this year. I think it is natural, that Monetary Policy will become tighter. And we could even have higher. Be well. S. , it could below 4. It has been tough to see. Iascarlet the sky is falling joe the sky is falling, Financial Markets is anything in the risks in areas that make you think a gray bull market. It might really come to an end. A 10 rise in the equity market. A natural part of equity investors. We are in somewhat frothy territory. I would be concerned if we would have continued very strong upward price momentum in the equity market if they would not follow through by the earnings fundamentals. Some of which we have seen. Scarlet when you mention frothy territory. I tend to separate at times, expected growth rates relative to the investment. Between Economic Growth rates and a stock return. Ironically, it would be japan a fairly tepid economic landscape for a decade. Those investors wouldnt want to ignore those parts of the market in addition to areas of opportunity. Think the mindset is it should be Global Market capitalization. Overseasure to positions. The political headlines seem to escalate. Do you think the market becomes more sensitive to potential headlines whether it is the United States or beyond . The desensitized environment that operates . Volatility is at an alltime low. We see a we hone in little bit more positive surprises and parts of the developed market. And we should see a rise in financial volatility early because that will be testing the assumptions in the bond market, whether or not the Federal Reserve will only go twice in 2018. The political environment has surprised me that we have not seen a little bit more volatility in the Financial Markets. It is unlikely to persist for a continued basis. Finally, i want to ask you about rates because perennially, strategists think the rates bottom and then usually dont. The same story next year . Could we actually see the long and u. S. Rates changing the trajectory . Our longterm expectation for the 10 year treasury is a reasonable benchmark and has not changed for four or five years. They also a clearly above and more often below, about 2. 5 . To move thatressed given what we diagnose diagnosis really fundamental secular drivers of longterm interest rate. Feedback into real rate expectations. If we see 3 or 3. 5 yield on the 10 year treasury, it would come as a surprise to me because i think there are powerful forces that offset. We will seekely, flatter yield curves rather than an environment of markedly steeper ones. Scarlet joe davis, thank you for joining us. The 1 trillion and the republican tax plan. We will hear from Larry Summers on his concerns about running up the deficit. This is bloomberg. Scarlet what did you miss . Another weekend another showdown on capitol hill. Running out of money on midnight on friday. Treasury secretary Larry Summers and asked him whether they would prioritize defensive domestic spending. Look at what is happening in the middle east. Spending, growing. Inevitably, it will mean a reduction in hundreds of billions of dollars. And i think we need that spending for national security. Looking at the potholes on the roads that cost americans the equivalent of . 75 a gallon and gasoline taxes, looking the way in which funding for cancer chores has been cut. Bursting. Ce is i think the domestic spending and we need more military spending. , taking a large amount of Government Resources and allocating it to the top 1 of the population seems to me to be a rather perverse priority. If i could take just one more minute, heres what i think the viewers should think about. With the bulls simpson process, we brought a Bipartisan Group together and tried to get the countrys finances under long run control. Liberals. Not flaky the director of morgan stanley. Alan simpson was a prominent republican senator. They are anything but flaky Big Government liberals. And that ofsion their commission which included a number of republican congressman and senators was that what we needed to do is stabilize things with 21 of gdp in revenue and 21 of gdp in spending. For the foreseeable future. So the Revenue Target was 21 of gdp. Will leave us nearly 20 behind that target by setting a target of 4 to gdp less. Less 700 million a year than bowles and simpson effort atve partisan deficit reduction. You cannot save a great nation on a shoestring. That is unfortunately what this bill risks condemning us to try to do. That was former u. S. Treasury secretary Larry Summers speaking with david westin today. And now Bloomberg Business flash, a look at some of the biggest stories in the news right now. You ownership of the Oprah Winfrey network, dave aid for an additional 24. 5 stake. The move raises discovery ownership to over 70 . This is the first time winfrey has sold stock in the Network Since it began a decade ago. Winfrey will remain the chief executive officer. Buy at now for 57. 5 billion. It will have a hand in everything from insurance to the corner drugstore. Officer john row had this to say in a Bloomberg Radio interview. The loses are probably the competitors of cvs and aetna because if this is a durable and sustainable new approach, then these guys get the first mover affect. Julia the deal is among the biggest healthcare mergers in the past decade and is expected to close in the second half of 2018. That is your Bloomberg Business flash. Time for the stock of the hour and todays big winner is macys. On pace for the best day in almost a month. This comes with the stock up 60 . T Abigail Doolittle has been looking into this. Is this driven by the Holiday Shopping season and how it is better than it acted . Abigail lets take a look at the 50 climb because i havent seen a mainline stock climb and thats pretty extraordinary. Out forught macys was dead. It has a lot to do at the Holiday Season but truly has to do with november. Up other department stores, very strong and cooler weather. A lot of demand for outerwear. Plus, going into the black that strongay weekend shopping trend. They are setting up for a strong Fourth Quarter here. That is part of the enthusiasm on part of the investors. You are a chart expert and in any longterm define, you could have these bounces. Some are big. What would you look or to say this is the start of something durable . Love that question, joe, and it leads right to the hash to the chart i have here. These are the 2009 lows. We have seen the extraordinary climb higher. We see the upward trend starting to reverse and the sellers are starting to take control. And this bumpy ride down. What im looking at relative to it looks as though the buyers are going to be taking shares close to 30. If shares break definitively above 30, there might be reason to think that this is a holiday bump and maybe extends right to 2018. Extenti wonder to what this is fueled by discounts, offers, things that will ultimately impact margins. Abigail it is interesting but we dont have that information now. We have reports of strong credit card data and on traffic, mall traffic. Thatnt know about discounting influence. And it could weigh on the margins. Investors are so excited to see any signs of life around mace these. Cracks before you start doing good, you have to do less worse. Thank you so much. It cvs buying aetna for an astounding 69 billion, but will this change the Healthcare Industry forever . We will take a look at the charts next. From new york, this is bloomberg. Joe what did you miss . Here is a trump trade making a new high. After the election, the ratio of the dow jones versus the s p 500 index going back through various presidencies. You can see it is a republican presidency. When it is blue, a democratic residency. The dow seems to outperform during republican presidencies. It did well under bush, underperformed during obama, and since then, with the s p down in the dow up, outperforming in hitting new highs under the trump presidency. There are various explanations. The composition, the industrial focus. I think the dow is the more populist index. Its the one everybody quotes, the one trump would care about. Making new highs under his watch today. 24,000 sounds so much better than under 30,000. When you look at the Corporate News stories of the day, cvs you can at no for see a net trading below that price, reflecting skepticism the deal will those at the current price. It is combining a supplier and a distributor of Healthcare Services which is typically less contentious when it comes to regulatory approval. The department of justice has been fiddling around when it comes to that. Better. S will get take a look at this chart which shows the backdrop for that argument. Expenditures that go toward health care will be relatively flat under obama care. Still at near record highs. A big thanks to mike mckee for bringing this to my attention. This will help house everything under one roof. Administration, retail pharmacies, corner clinic. Julia the Chilling Effect we talked about when the investigation first began. Comparing the market cap of bitcoin to some u. S. Companies and the growth we have seen. If we talk about companies, why dont we talk about some countries as well . At up the value of bitcoin, coming to 190 billion. That is the yellow line. Market value of bitcoin is higher than the likes of romania, new zealand, iraq, and algeria. Joe it is higher, though. Julia and greece. Tough comparisons. I will report back in a couple of weeks time. We have been paring gains for the dow but still higher in the dow. Whatd you miss . Optimism surrounding tax cuts in the future. I am julia chatterley. I am scarlet fu. Joe i am joe weisenthal. Welcome to our closing bell coverage. Scarlet we begin with our market minute. It looked like it would be a bullish day for equities, and then we drifted lower. The dow finishing higher, up 57 points, well off its best levels of the session. The nasdaq has been dragged down by big cap tech names. Joe trump tweeted this morning that this could be a big day for the stock market, but predicting stocks is tough. Big day for the wrong reasons. Announced a has takeover. That will really phase a test when regulators take a look at it. As we know, the Trump Administration approach so far industry changing corporate takeovers has been a , judging byukewarm at t and time warner. In terms of other deals possible, 21st century fox and disney coming up once again. They are in discussions again according to people familiar with the matter. Talks with disney and comcast about combining certain media businesses everythings like foxnews and fox sports are off the table. Blue apron getting a big top, a by 17 after getting its first upgrade ever. Joe is chuckling. Still trades almost 70 its asking price from june. Joe lets take a look at the Government Bond markets, starting in the u. S. , rates higher and once again flattening. He yield up to 1. 81 2. 37 . Year moving up to one of the winners today, greece, fiveyear yield falling bailoutn news that transfers are being approved. We talk about greece much anymore because things are going pretty smoothly there. Nonetheless, positive news. No news is good news as far as greece is concerned. Sterling relinquishing gains, briefly plunging. It failed to produce a hopedfor agreement on brexit. We didnt see both sides striking an optimistic tone after we did see both sides striking an optimistic tone after the talks. That the talks ended before an agreement could be reached. Still high hopes. But as you can see, a bit of noise going on in sterling. Had some concerns over the weekend. On sunday, the president generating market jitters talking about those attempting to smuggle their wealth abroad. Qs all sorts of controls about concerns about capital controls attempting to lock down money escaping the country. Outflows flowing for the first time this year to 1. 8 billion dollars. Thats the lowest annual pace since 2010, just to give you a bit of perspective. I am showing you the move over the last two years, not that great, as you can see, in terms of currency strength. On commodity, lets start with the basics, oil and gold, both down today. Last week, opec news gave us some lift. Gold down modestly. Here is some good news for everyone. If we look at a oneyear chart of avocado prices they are a commodity. Down substantially in july. Remember the avocado panic. Millennials would never be able ofafford a home because spending all their money on avocado toast. Scarlet julia was really excited about the avocado chart. Action in the wake itprogress on the tax bill, started off everyone was celebrating, but the way the trading day progressed, stocks closed near their lows and dipped below 2. 3 7 at one point. Our bond vigilantes back . Critics in terms of the stock ket in terms of the stock market, after fridays crazy day, it was a disappointing sequel. To expectevery reason equities to trade well today. The dow went up today. But under the surface, it was a. Retty ugly day i. T. Stocks, particularly chips, have done horribly. A semiconductor is down 9 since thanksgiving. That hurts. You anticipated my question. A one day moves, you cannot read that much into it, but we are seeing a pattern, particularly on tech underperformance. A lot of companies are not in a orition to benefit from tax as much as other companies are. Therecertainly looks like is position shuffling going on. For the last five or six trading days, even on days when the s p 500 rallies, if you look at the correlation between the day we moved the stoxx versus your today performance, in many cases, it has been negative. For example, the top 10 stocks on the day would be all negative year to date and the bottom 10 would be up 60 or 70 . That does suggest that positions are being shuffled. We are probably going to some companies will benefit by being able to write off investment and these Companies Invest quite heavily. If something hurts, you close everything down. Julia the net change in the market tended to be very little. We saw the rotation from tech stocks into the likes of financials. We are seeing the same thing again. To what extent is this just trading . It is hard to say. There is a catalyst via the tax reform. Its probably a combination of a lot of things. December trading, weve had a good year. Sweep some chips off the table. This provides a catalyst or a kick depending. It definitely feels like a rally is more fragile than it used to be. It wasght, for a while, every day same old thing. Clearly a different five. I want to switch away quickly from equities and talk about over the breaking 1. 8 twoyear. What you make of it . A couple of things. It is pretty typical for a tightening cycle to see twoyear yields march higher. That is in line with the idea that the fed will keep pushing rates up and you have to price that in today. That will put the midpoint of the fed funds target at 1. 38, 1. 37 five. Pricing a twoyear yield a 1. 8 is a bit more enticing, but not a whole lot. There was a story earlier today the japanese were catalyzing this because if you look at two year yields and what they offer japanese investors, once they had to the currency back, its not very good. U. S. Investors can buy jgb and logged a quite nice return. That might be driving it as well as japanese managers say thank you very much isnt enough for me. For yourank you insights. Cameron price, Bloomberg Global macro strategist. Coming up, the house and senate look to reconcile their differences on taxes. We will have the latest next from new york. Mark i am Mark Crumpton crumpton with first word news. Todon and brussels fail reach an agreement on some of the more contentious issues on brexit after theresa may met with European Union officials today. Despite our best efforts and significant progress, we and our have made progress on key issues. It was not possible to reach an agreement today. Mark talks will continue next week. Outils need to be hashed before both sides can begin trade talks. Former consumer watchdog head Richard Cordray is set to launch his long anticipated bid for Ohio Governor tuesday. The Associated Press reports a Campaign Adviser spoke on the condition of anonymity because the information was not yet public. Cordrays stepped down as head of the Consumer Financial Protection Bureau last month. Ohio attorney general and treasurer. Whether tol decide people can be extradited from belgian to spain a week before a key election in catalonia. The group has refused to return to face embezzlement charges that can be punished with decades in prison under madrids criminal laws. Are marking the First Anniversary of fidels burial in castro. Ernmost city of of san paolo. Dominated the island for most of their lives. He is buried in an Historic Cemetery alongside revolutionary notables. News 24 hours a day powered by more than 2700 journalists and analysts in over 120 countries. Im am Mark Crumpton. This is bloomberg. Breaking news. The Supreme Court has allowed Donald Trumps travel ban to take full effect. It will apply while appeals go forward. This is take three, i believe. Chad, iran, libya, north korea,. Yria, venezuela, somalia Supreme Court saying the ban can go into effect while appeals take place. We will bring you further headlines. What did you miss . The house is working on compromise tax overhaul legislation today. The bill would give republicans a badly needed a victory. The challenges, are many. A huge step forward it felt like for the senate even getting this voted on. We go in terms of adjusting the Senate Version to bring the house on board, particularly when the president is throwing out the possibility of a 22 Corporate Tax rate . The vote on saturday morning was probably the toughest part of this operation. Objected over concerns about the deficit. Now they have two reconcile the house version and send one bill to the president for his signature. Can lose 22icans members. The bill is likely to look more like the senate bill eventually. There are key differences. Of thethe preservation corporate alternative minimum tax and preserving a big part of tax. Lternative minimum another thing to keep your eye on is the individual mandate repeal. This is an explosive thing that could mess things up a little bit. Susan collins says she wants stabilization measures to vote on the final bill. Joe we are going to be talking a lot about taxes in the coming days. Something very important is the threat of a government shutdown. What do we need to watch for . The government is set to run out of money by friday at midnight. Looking tors are extend the deadline by two weeks to give themselves some breathing room. There are several issues that democrats want, and they need to provide at least eight votes to prevent a filibuster. Fix for undocumented dreamers. And they want an extension of the Childrens Health Insurance Program pilling program. Ability tohe filibuster if they dont get their priorities. They have not taken a position on this issue, but that is what coming up. Torlet what is most likely get republicans support, for republicans to take up and run with them . Probably the Childrens Health Insurance Program. Was off third in part by senator orrin hatch. It insures 9 million kids. It expired a few months ago and has not been extended. It could leave a lot of children in the lurch. That is probably the most likely one. The least likely one is daca. Politicsgration, the are always dynamite for republicans. They are not interested in tackling this one, despite President Trump insisting they look at it. Any meetings scheduled with Chuck Schumer and nancy pelosi . Wax the infamous meeting with chuck and nancy, the democratic kneelers, as they are known, is now rescheduled for thursday democratic leaders, as they are known, is now rescheduled for thursday. One day before the government runs out of money. Scarlet waiting until the last minute there. Thank you so much. Canadian Prime Minister Justin Trudeau is in china this week but he is not making much progress when it comes to free trade talks. From new york, this is bloomberg. Launch freeush to trade negotiations between china and canada fell flat today. Justin trudeau said one Sticking Point was the progressive tax. Trudeau and chinas premier briefllor each made a statement and took no questions. For more, lets bring in josh, who covers canadian politics in ottawa. Talk to us about what is met meant by a progressive tax. What is canada looking for and why didnt they get it this time around . Justin trudeau was elected with a fairly left leaning mandate. To add chapters in labor, gender, indigenous rights, and to be environment. These things are eight half cell in some markets. Nafta, for instance. You can imagine donald trump is not filled thrilled by a lot of them. China has a preference for pared down, no bells and whistles types of trade deals. You have two opposite approaches when it comes to trade. They have been trying to do this for years, to launch free trade talks with canada. Precedent. Of a want to dealna with canada more than the other way around . For the last decade that was true, but Justin Trudeau has a little bit of a challenge. His voters are younger and more urban. The math might be different for him. We can infer from two days weird developments in beijing that they dont think they were able to get a deal done. If they do get a deal done, he needs to be able to sell it to his coalition of voters. He cant do that unless they have other topics in there that china doesnt seem to be keen on. He said, this is a template. It is very important. It from canadas , doesnt canada need to be worrying about the need for diversification in light of the challenges they are facing with nafta . Do you think they come back to this because they did seem to suggest that talks would continue. 10 they come up with the goods here . Potentiallyhat is true. A lot aboutalked needing to pivot and take some eggs out of a u. S. Basket. Canada is more reliant on u. S. Trade than any other country in the g20. Given what is going on with donald trump, they have said they need to find a way to pivot internationally. Donald trump quit the deal with japan. Theda is largely holding up agreement. Its a bit of a highstakes game. The tppa balance with also playing footsie with china and seeing what kind of deal they can get with them. Keep in mind the eu deal still has to be individually ratified. Nafta is the biggest question, followsdonald trump through. He needs all the trading partners he can get. Scarlet it is time for the business flash. 21st century fox said to favor disney as a buyer for some of its assets according to people familiar with the matter. The Murdoch Family is holding talks with disney as well as certainabout combining media businesses. Netflix will produce a choose your own Adventure Program for adults. It will allow viewers to pick different endings. Netflix says it is continuing to prioritize original series because it builds customer loyalty. Morgan stanley trying to woo investors with a new digital platform. Asents can have as little 5,000 to invest. Wealth expected to shift from baby boomers to millennials in the next decade could be as much as 30 trillion, so quite the opportunity there. Flashs your business update. Coming up, deal or no deal . Theresa may still waiting for a in brexit negotiations. This is bloomberg. Retail. Under pressure like never before. And its connected technology thats moving companies forward fast. Ecommerce. Real time inventory. Virtual changing rooms. Thats why retailers rely on comcast business to deliver consistent Network Speed across multiple locations. Every corporate office, warehouse and store near or far covered. Leaving every competitor, threat and challenge outmaneuvered. Comcast business outmaneuver. Mark i am Mark Crumpton with first word news. The Supreme Court will allow for now the full enforcement of Donald Trumps travel ban applying to residents of primarily muslim countries. Bader ginsburg and Sonia Sotomayor dissented from the new order. The new Supreme Court ruling does not directly address the merits of the legal challenges. During his visit to utah today, donald trump told reporters he is encouraging orrin hatch to consider running for the senate. This would block amid romney from potential candidacy. The president downplayed that notion. You are a true fighter. I have gotten to know him well. I have gotten to know a lot of people well. He is a fighter. We hope you will continue to serve your state and your country in the senate for a long time to come. hatch is the longestserving republican senator and will be seeking an eighth term in 2018. Germanys foreign minister says yemen is experiencing the worst humanitarian catastrophe in the world. The country has an ongoing civil there was a missile attack on the saudi capital riyadh last month. This came hours after rebels announced they had killed the countrys former president. The first ever text message was sent 25 years ago this month. A british engineer sent it from a computer to a mobile phone belonging to richard jarvis. Simply, merry christmas. It jarvis was unable to reply phones at that time, could only receive messages, not send them. Global news 24 hours a day powered by more than 2700 journalists and analysts in over 120 countries. I am Mark Crumpton. This is bloomberg. Scarlet the day started off well enough. The russell 2000 closing lower. The one day reaction to the tax news is not that important. The ongoing diversion is very interesting. Are on all eyes business and market cycle indicators. Our next guest believes 2018 will likely be quite different from 2017. He believes financial conditions she believes financial conditions will gradually tighten next year. Lisa, good to be with you. Bit about a little 2018. What will stay the same . In the globalntum economy. We will continue to see growth closering at levels much to 3 than 4 . Differenced the big is financial conditions will start to get tighter . I think one of the biggest surprises of the year was people thought the fed would be tightening, thought the u. S. Dollar would be stronger, thought oil prices would rebound. We have the opposite. Thatve a market essentially absorbed tightening. Who thought the u. S. Treasury would be lower today than it was in january. That combination of financial conditions is one of the things that has helped fuel this market in addition to global rebounding growth. Talked aboute synchronous Global Growth and the optimism that is providing. One of the critical elements we is a stagnation in capital expenditures. I think the critical thing is there will be a change there and both of these things are going to see an improvement. Why . Thatank you for making reference to the recent report we did. We do see, finally, and maybe this tax will is one more to Capital Spending beginning to turn up. About nine months ago, we started to see marginal returns thearginal benefits and primary purpose of cash begin to do grade. Now, with Global Growth picking up, companies have an opportunity to invest with a goal of garnering more productivity, market improvement, and market share. As that goes up, so does productivity. Productivityabout as the sort of androgynous thing where we make breakthroughs. But fundamentally, it is a cyclical indicator. I would tend to agree with your characterization. People have characterized productivity in the last decade as some sort of secular phenomenon. It differently. As something else. Corporate executives are rational. When the cost of capital is more advantageous than the cost of labor, they substitute them, and that begins to unleash productivity improvement. Joe you square productivity with the of session with robots, computers, ai taking of the workforce. There would be productivity enhancing innovations, but it doesnt seem to have any bearing on anything . Scarlet for now. For now, and that is the key thing. One of the reasons we havent seen productivity as high as some people might have thought has to do with technology diffusion. Haveow broadly adopted these technologies been . , we have a small number of category killer Type Companies adopting technology at but that is not if using technology for the rest of the companies, many of whom may be Service Oriented or smaller cap. I think that is the next stage. Productivity growth that allows the great dispersion of technology . Is at the chicken or the big . From our perspective or the egg . From our perspective, its Global Growth. When theres Global Growth, companies have the ability to do the mathematics on the equation and ask if they should invest in capital or labor. What does this mean for the Economic Cycle . What will the next downturn look like . Thats a fantastic question. Our view of how this phenomenon changes the cycle is it makes the cycles shallower. Because we have had this Economic Cycle with an absence of Capital Spending and productivity. We think the next recession will because shouldnt buy that. As we come out of the next recession, will be cushioned by that. As we come out of the next recession, which we think will be shallow and gardenvariety, the next piece is technology. We see a series of technologies now coming together in terms of their maturation, where we can start really putting things together in a way that becomes one plus one equals three. Autonomous vehicles, ai, big data. Julia thank you so much for joining. Up next, more on the revised talks between fox and the house of mouse. This is bloomberg. Scarlet 20th century fox is said to favor disney as a buyer for some of its assets. Murdoch family is holding talks with disney as well as comcast about combining certain media assets. Joining us is paul sweeney. Credibility do you put in these discussions . A Media Conference today and all the chatter was deal making. Did any of us ever think we would see the day when Rupert Murdoch was willing to sell all or part of his company . That said, these assets are for sale and there are buyers lined up. Areink the wildcard is what the regulators going to do at the department of justice . They surprised everybody by throwing a wrench into the time warner deal. Joe is there a reason why disney would be a better fit . Fit isbest strategic disney. Disney Needs International exposure. 20th century fox brings big. Nternational investments if you are disney, you have a great portfolio of assets. This may be a way to bulk up. Not everybody thinks this deal is likely to go through. We spoke to a Capital Advisor earlier today. Listen to what he had to say. Someone is out talking to the press about this. If people want to have a quiet conversation, they can do so. This is not a quiet conversation. Somebody is making it known that this is in motion. The murdochs are inviting comcast, disney, or others to come forth. They clearly think this is the do it. Iate moment to i know him well. We is to work together. I know he has his ear to the grindstone. What has shocked everybody is that the murdochs would ever sell assets. They were recently seen to be a better buyer than seller. I think they will probably step back and say ruperts 86 years old. Control has been passed on to his children. They may be looking at the media landscape and saying it might be a good time to sell certain assets. Julia do you think we could look back at this in a few years time and say that they called the peak of the market for legacy Media Companies . Thats very possible. Paul sweeney, thank you for that. Up next, briggs it can wait. And upset over the irish it can wait. Over the and upset irish border issue mean for theresa may . This is bloomberg. Julia europe is still waiting for a brexit breakthrough. Efforts andur best significant progress, we and our made over the past days on major issues, it was not possible to reach a complete agreement today. Around thes were volatile issue of the irish border. The Prime Minister stressed he remains confident a deal can be reached before the European Council meeting next friday. We are joined by the director of strategy from london. Always great to get you on the show. Prime minister theresa may made a phone call to the party that supports the government in the u. K. And then it seemed all bets were off. Can you tell us exactly what issueed with this ongoing of the irish border . Its a very contentious issue in the divorce. , it the u. K. Leaves the eu is set to leave the Customs Union. , there willstion is have to be a hard border with Northern Ireland. This is an acceptable to all parties in the talks, unacceptable to the government on except about of well jim, belfast unacceptable to belgium, london, and belfast. Close to the Customs Union and in the last minute said this was unacceptable to the dup because it would mean that it would be setting itself on a different course from the rest of the u. K. They have proven to be quite pragmatic. They are probably using this as a negotiating tactic. Theresa may will definitely be trying to talk to her allies and get parliament to really push forward in the next week because that is when it is really crunch time. Joe we saw the pound with today a the reports that they had a deal, then no deal, then a bounceback because they are still optimistic that they are getting closer. In your view, is a deal within reach even though in a way it seems impossible . It is going to longterm get a lot more emotional and there will be a vulnerability volatility with the pound. Beene eu says enough has done on phase one and we can move forward to future trade relations, thats when the talks really get started. And i think the market has factored in the risk, but there is still a big risk that talks are not done completely. When it comes to volatility on the pound, i think there are choppy times ahead. Julia 17 months since the referendum. 15 months before britain leaves the eu. To your point about the risks that surround it, what does a if theyok like, and make fudge, then they negotiate a trade to and it comes to bite them in the you know what later on . On the issue of ireland, there is no real solution, so one side or the other is going to have to accept a fudge. The would have to accept that there is no hard border. They are saying now that Northern Ireland could get special status, or the u. K. Will have to bend, or the irish will have to bend. , on the tradee deal, i think its quite clear the eu can have from their perspective is canada style trading on goods with limited access to services. If you think about the future relationship, the u. K. Will have to be doing a lot more negotiations with the eu on other things from access to services, security, and thats going to take a lot of time, and again, i think the talks are going to get a lot worse. With the eu allow the u. K. To leave the customs and remainhat border to soft . I think the eu is very aware of how treacherous fish issue is this issue is. Nobody wants to be seen as the to the troubles starting again. There has been a lot of anger. What has been interesting, in westminster, the shock about this issue, it seems to be such a huge issue, but on the irish side and the eu side, they have been aware since the beginning that this is a contentious issue, and because it is tied to political troubles from not that long ago, everybody wants a solution, but with the redlines now on each side, it is not clear what the solutions will be. Even if there is sufficient progress next week, it will come back in the talks again. Real sensitivity around the irish peace process. Scarlet absolutely. It also sets a precedent as well. Northern ireland voted to remain in the eu. If Northern Ireland gets special status, which is what the republic of ireland once and what the commission suggested is that somehow the border could be putting aectively hard border between Northern Ireland and the rest of the u. K. , the scottish minister tweeted today that the welsh minister tweeted today that if ireland gets special treatment, wales would want that, too. Has a lot of elements on her plate right now. Considering how difficult the challenge is ahead, its easy to see what i would get emotional. Why it would get emotional. Whichs there any point at the eu should be the one to cede some ground . I think the eu has been very some pathetic to the irish position. Lets not forget that aside from the consequences of the decision , there is a whole plethora of economic consequences as well. , eu 26 has been very much behind ireland. There were talks in dublin the other day. Privately, i have been hearing some companies saying we need to on because there is a risk that theresa mays government falls, and then there is no saying what happens to the brexit talks. The rest of the eu have assured ireland that even if it is somehow a fudge next week, the issue of ireland will be revisited in future trade talks. Julia great to chat with you. Always smart, sparkly at 10 00 p. M. In the evening in london. Joe coming up, what you need to know for tomorrows trading day. This is bloomberg. Coming up, eu finance ministers will be meeting in brussels at 3 00 a. M. Eastern. Joe i am looking at u. S. Data out in the morning. Out miss this. A Media Conference with Mark Crumpton and the New York Times ceo. Scarlet thats all for us. Is this a phone . Or a little internet machine . [ phone rings ] it makes you wonder. Shouldnt we get our phones and internet from the same company . Thats why Xfinity Mobile comes with your internet. You get up to 5 lines of talk and text at no extra cost. So all you pay for is data. Choose by the gig or unlimited. And ask how to get a 200 prepaid card when you buy any new samsung device with Xfinity Mobile. A new kind of network designed to save you money. Click, call or visit today. Washington and you are watching bloomberg technology. President has signed proclamations to scale back two sprawling National Monuments in utah. The president traveled to Salt Lake City to make the announcement those declarations. The move is supported by utahs Top Republican republican officials, but opposed by tribes. The Supreme Court will allow enforcement of the Trump Administrations travel ban, affecting eight countries, six of them with a muslim majority. Judges are allowing the restrictions to take full effect. Those against the ban collet discriminatory and the violation of the u. S. Constitution. Schumerlosi and chuck hope President Trump keeps an open mind when he meets with them thursday. The top two democrats accepted an invitation from the president for a summit to avoid a potential government shutdown. Federal money runs out at midnight friday. Wasfirst ever text message sent 25 years ago this month. A british en